Fixed-to-mobile substitution in the European Union

This paper analyzes substitution between access to fixed-line and mobile telephony in the European Union using cross-section panel data on households’ choices of telecommunications technologies in years 2005–2010. We estimate a structural model of household?s demand for access to: (i) fixed-line only; (ii) mobile only; and (iii) both fixed-line and mobile. We find that growing Internet usage increases the share of ‘fixed + mobile’ households, which suggests that households keep their fixed-line connection to access Internet. However, the spread of 3G and cable broadband access decreases the share of ‘fixed + mobile’ households and increases the share of ‘mobile only’ households. Hence, fixed-to-mobile substitution was slowed down by the spread of Internet but it may continue with the spread of mobile broadband. Furthermore, bundling of telecommunications services increases the share of ‘fixed + mobile’ households and decreases the shares of ‘mobile only’ and ‘fixed only’ households. Therefore, operators which can bundle fixed-line connection with Internet or mobile services may slow down fixed-to-mobile substitution.     

Xiaolingtong versus 3G in China: Which will be the winner?

Xiaolingtong (XLT), a new type of mobile phone system based on PHS technology for wireless access of fixed-line telephone networks, has grown very rapidly in China. However, there are many doubts about the future of XLT once 3G (the third generation of mobile communication) is finally employed. This paper proposes a theoretical framework to assess and compare XLT and 3G from four perspectives: technology, market demand, business models and government policy. It concludes that XLT and 3G will coexist with existing 2G/2.5G mobile communication networks for a considerable period of time. With service collaboration and integration, the coexistence of both of these technologies can enhance China's mobile communication infrastructure and support the growth of mobile commerce.     

Mobile phones,the Internet and the institutional environment

This paper empirically investigates the determinants of the Internet and cellular phone penetration levels in a cross-country setting. It offers a framework to explain differences in the use of information and communication technologies in terms of differences in the institutional environment and the resulting investment climate. Using three measures of the quality of the investment climate, Internet access is shown to depend strongly on the country's institutional setting because fixed-line Internet investment is characterized by a high risk of state expropriation, given its considerable asset specificity. Mobile phone networks, on the other hand, are built on less site-specific, re-deployable modules, which make this technology less dependent on institutional characteristics. It is speculated that the existence of telecommunications technology that is less sensitive to the parameters of the institutional environment and, in particular, to poor investment protection provides an opportunity for better understanding of the constraints and prospects for economic development.     

Regulatory factors influencing Internet access in Australia and China: a comparative analysis

Internet access is determined by a combination of a widely available telecommunication infrastructure and affordability of Internet services, which are closely related to government policies (IT Group. (1999). Like other countries, both Australia and China have considered the Internet a powerful tool for national development economically and socially. As Internet growth becomes more and more significant, it becomes important to address the extent to which the underlying communication policies influence current growth rates.This paper provides a comparative review of policy approaches to regulating the Internet in both China and Australia. This study aims to identify the regulatory factors affecting Internet access in terms of availability and affordability, especially those factors which encourage the creation of a policy and regulatory environment favourable to the development of Internet infrastructure and access.This paper examines the linkages between regulatory regimes, market environments and Internet access in both China and Australia. The preliminary result suggests that government policies governing the telecommunications service market and promoting information infrastructure have a significant impact on the affordability and availability of Internet access. The most significant factor is the level of competition permitted in the telecommunication sector. It has become clear that further regulatory initiatives such as deregulatory mechanisms and interconnection regimes are needed to establish a more competitive environment for Internet access in both countries, and more particularly in China.     

Access to and penetration of ICT in rural Thailand

This paper presents an econometric study of information and communication technology (ICT) in all 70,000 rural villages in Thailand, where the ICT considered consists of fixed-line telephone service, mobile telephone service, public telephones, computers, and Internet service. The results may provide information that helps policymakers decide where to put limited resources to promote ICT, and helps profit-seeking ICT companies target regions that maximize revenues. The study found that education is far more important than income in predicting the percentage of households who adopt ICT services, and that some unexpected variables such as the penetration of pickup trucks are useful predictors as well. Even in areas where fixed-line phone service is available, 70% of households with computers choose not to become Internet subscribers, although many presumably have enough money and technical knowledge. By separating availability from penetration of ICT, the study found that they can have different predictors, which means that researchers who do not separate them may get misleading results. There is no evidence showing mobile telephone service as a substitute for fixed-line telephone service. Also, public telephone service had little or no impact as a substitute for fixed-line or mobile telephone service, so phone companies need not fear that deployment of more public telephones will decrease their subscribership. Finally, there appears to be significant unmet demand for telephone service in rural Thailand where the infrastructure does not yet exist.     

Retaining telecommunication services when universal service is defined by functionality: Japanese consumers' willingness-to-pay

This study uses contingent valuation to measure Japanese customers' willingness-to-pay to maintain combinations of five telecommunication services that are considered substitutes if universal service is defined on the basis of functionality. The analysis revealed the following results. First, consumers are more willing to pay to retain voice communication services than data transmission services. Second, customers accept Internet Protocol telephony as a substitute for plain old telephone service (POTS) as a universal service, and they are willing to pay much more than Japan's current Universal Service Fund charge. Third, even when mobile phone service (MOB) is available, consumers will pay to retain fixed-line voice services. Finally, consumers have an equal desire to keep fiber-to-the-home (FTTH) and fixed-line voice services, but it is less than the demand for MOB. Thus, under the present definition of POTS as a universal service, FTTH could be considered as a basic telecommunication service.     

Unbundling and infrastructure competition for broadband adoption: Implications for NGA regulation

The common idea of open access policy is that it refers to the sharing of particular elements, such as wholesale access networks, backhaul, under-sea cable and internet exchange points in fixed and mobile networks. In broadband networks, the use of open access policy usually refers to the infrastructure parts, which are considered a bottleneck. Many regulators have generally focused open access policy on fixed broadband networks, especially digital subscriber line (DSL) technology, in the last decade. Local loop unbundling (LLU) regulation is one of the main strategies for the regulator to open access to an incumbent’s bottleneck network in order to soften its monopoly power and encourage competition in the DSL broadband market. The OECD countries have different strategies regarding unbundling local loop and infrastructure competition, as the characteristics and infrastructure networks of countries vary. There are currently more choices of next generation network (NGN) technologies to develop. While local loop unbundling may not be applied fully to NGN development (the cost is not sunk, more technologies are available to implement, incentive of investment by operator), it can indicate benefits and drawbacks of open access policy in the past decade that can be adapted to NGN.The empirical results of this study show that during 2002–2008, LLU regulation was one of the strategies used to increase broadband adoption in countries that had difficulty encouraging infrastructure competition. Unbundling regulation can therefore be implemented carefully and differently in each country that has inefficiency that is harmful to consumers in its market from a monopoly incumbent. Infrastructure competition, on the other hand, is introduced as another strategy to increase broadband adoption. The empirical results of this study indicate that infrastructure competition can be used as a strategy when there are already enough infrastructures in the area or country. These results support the idea of using open access and infrastructure competition policy depending on the existing competition of broadband infrastructure in each country.     

VoIP deregulation in South Africa: Implications for underserviced areas

Several statutory restrictions have recently been lifted on the use of Voice over Internet Protocol (VoIP) in South Africa. Previously, VoIP could only be utilised by the incumbent telecommunications operator, Telkom, the Second National Operator (SNO) and under serviced area licensees (USALs). This means new opportunities and cost savings for both network service providers and consumers. However, in rural and remote regions, further liberalisation is required so that service providers can take advantage of wireless technologies to provide connectivity in these areas. This paper discusses the legislative environment in South Africa and around the world with respect to VoIP and Wireless Fidelity (WiFi). In addition, examples are provided of how these technologies have been combined to provide last mile solutions around the world and particularly in South Africa. The paper concludes that further liberalisation in the telecommunications environment in South Africa is required if the goal of providing affordable access in rural areas is to be attained. Specifically, it is recommended that wireless technologies be deregulated since the combination of VoIP and WiFi may benefit rural areas. Also, the paper finds that USALs may not be the right model for underserviced areas in South Africa. Lastly, it is apparent that applications drive development and dictate which technologies are relevant for rural areas.     

Moving targets: Introducing mobility into universal service obligations

Structural changes in the economies of developing countries are leading to increased mobility of work and family life, and so an accommodating set of universal service obligations (USOs) implies new goals that extend beyond wireline telephone penetration and access. Wireless telephony penetration frequently exceeds wireline penetration in developing countries, and digital wireless platforms can incorporate Internet technology. This paper evaluates the history of telecom development in Mexico that has led to wireless telephony becoming the new consumption norm. The study takes the eMexico project as a case study of diversified USOs beyond wireline telephony. It considers potential obstacles to incorporating mobile phone and Internet (“Wireless Web”) services into Mexico's diversified universal service policy, including economic barriers to political mobilization over issues of telecom policy.     

Rural internet connectivity

This research investigates Internet connectivity in rural regions, looking specifically at four states in the US. Access to the Internet has assumed new significance for commercial and political reasons, and remote and sparsely populated areas typically lack the telecommunications infrastructure for reliable and fast Internet connections. Even as government programs such as the federal E-rate provisions bring Internet connectivity for institutions such as schools and libraries under the government's universal service umbrella, more general Internet access to a broader community constituency has not been addressed within policy circles. Even the deployment of so-called “national” Internet services favors urban regions.Research associates Kyle Nicholas and Lisa Parker were instrumental in undertaking this research, as was financial support from Southwestern Bell and the Rural Policy Institute. The comments of an anonymous reviewer helped greatly.     

A layered United States Universal Service Fund for an everything-over-IP world

Support through the United States Federal Universal Service Fund for high-cost areas has been principally defined in terms of telephone service. Fund growth due to increases in wireless lines and implicit support for broadband infrastructure has created an untenable situation, and fundamental reform is expected. The cause underlying this growth is convergence between the telephone network, wireless networks, the Internet, and cable networks. This convergence will pose additional serious long-term challenges to the fund. This paper proposes a restructuring of the high-cost funds based on a layered model. Both contributions and distributions are focused on network infrastructure, without distinction between voice and broadband. The proposal uses a new definition of communication services to guarantee technology neutrality, and includes service area reform and cost efficiency measures. This layered approach repositions the fund for future converged networks.     

The Internet of Things as an accelerator of advancement of broadband networks: A case of Thailand

The advanced development of broadband access is an inevitable step toward supportive daily lives and sustainable economic growth. However, the decisive outcome of the development relies heavily on the demand side. Consumer choice among advanced Internet broadband technologies will determine the achievement of the development. This study aims to illustrate that consumer decisions on choices of advanced Internet access are influenced by the emergence of the Internet of Things (IoT) applications. A bivariate probit model is applied to examine the effects of IoT, consumer's individual characteristics, and their current use of networks on their decision pertaining to the choice of advanced Internet access. Using Thailand as a case study, the result indicates that the emergence of IoT applications accelerates the adoption of both advanced mobile broadband (5G) and advanced fixed broadband (FTTH). This finding may help policy makers to optimize the future direction of the Internet infrastructure development in Thailand, and also countries in a similar stage.     

Australian Residential Telecommunications Consumption and Substitution Patterns

Better telecommunications pricing decisions are able to be made when more complete information concerning relationships among services is available. This study analyses residential fixed-line and mobile telephony, and Internet access and usage demands in an encompassing framework. The discrete-continuous framework allows for service interaction within and between service portfolios. Model estimation is based on the examination of data collected from a country-wide survey of Australian households. In particular, observed service portfolios (household consumption patterns at prevailing access prices and estimated average service usage prices), income and demographic characteristic data are collected. These data also allow the modelling to potentially identify market segments based on income and other household characteristics.JEL Classifications: D12, L11, L69     

Broadband expectations and the convergence of ranks

Broadband Internet service to widely held to be a significant contributor to economic development and global competitiveness, and comparison of adoption rates across countries are common. This paper presents evidence that the relative broadband Internet adoption ranks across the Organisation for Economic Co-Operation and Development (“OECD”) countries are converging to the wireline telephone adoption ranks in the mid 1990s. This was a time when wireline telephone service had reached maturity, but before consumers began to abandon traditional telephone services for mobile services and Internet telephone technologies. As such, in the absence of better data on household adoption, wireline telephone rank is a useful proxy for a country's ultimate fixed-line broadband penetration rank. Having such an educated guess available regarding broadband rank should reduce the amount of anxiety over rankings, since similar rankings across the two services implies suitable broadband performance. Large departures, alternately, may be a cause for concern or delight. Like prior analyses, the findings suggest that the adoption of communications services is largely an economic and demographic issue.     

Analysis of fixed broadband access and use in Thailand: Drivers and barriers

The aim of this paper is to analyze the demand for fixed broadband in Thailand. Data were obtained from a national survey in 2010 by the National Broadcasting and Telecommunications Commission (NBTC) of Thailand. The bivariate probit model was employed to examine empirically whether accessibility to fixed telephony infrastructure, socio-economic variables and the area of residence have a systematic link to fixed broadband access in the first stage, and then, specific usage, provided access exists, is estimated. Results of this study show that the variables, together with their potential impact, are as follows: fixed infrastructure, income, gender, level of education, age of consumer and residential area. The impact of these factors varies from service to service (i.e. video download, social network, searching and e-mail). The implications for the NBTC are to encourage competition through the infrastructure and to permit more competition in infrastructure development. This could stimulate the growth of fixed broadband access and use. At the same time, the government could also implement policies to encourage more access and usage, for example income subsidization and training program.     

Evolution and determinants of digital divide in Brazil (2005–2013)

During the last decades, the widespread growth of information and communication technologies (ICT) has posed incentives to broaden the participation of individuals in social, political and economic dimensions of life. However, utilization of ICT also involves access to technology and infrastructure, and acquisition of skills to deal with innovations and, thus, digital literacy is, primarily, a complementary good. The digital divide expresses inequalities in access and utilization of ICT among individuals and populations in different countries. The study adopts inequalities indexes of Internet access and mobile phone ownership to measure use of ICT goods, accounting for the digital divide in Brazil. The inequality indexes are also split according to main determinants using four nationally representative survey data from 2005 to 2013. Results indicate that the digital divide among individuals is decreasing quite fast among Brazilians over time. However, there is room for policies of mass access to ICT goods based on mobile Internet broadband access. In addition, digital illiteracy, evaluated by lack of education, is one of the main determinants of the digital divide in the country, especially among elderly individuals.     

Technology,education, and economic growth in Sub-Saharan Africa

This study examines whether telecommunications infrastructure promotes economic growth in countries with better access to education compared to those with less access. Using a panel of 45 Sub-Saharan African countries from 1993 to 2015, the results using the fixed-effects, two-step feasible efficient generalized method of moments estimator indicate that in countries with better access to education, the Internet contributes to economic growth, while mobile phones do not seem to do so. These results suggest that while education is regarded as pivotal for the Internet, it seems to be irrelevant for mobile phone usage.     

Multilevel governance and broadband infrastructure development: Evidence from Canada

This paper investigates the contributions of digital infrastructure policies of provincial governments in Canada to the development of broadband networks. Using measurements of broadband network speeds between 2007 and 2011, the paper analyzes potential causes for observed differences in network performance growth across the provinces, including geography, Internet use intensity, platform competition, and provincial broadband policies. The analysis suggests provincial policies that employed public sector procurement power to open access to essential facilities and channeled public investments in Internet backbone infrastructure were associated with the emergence of relatively high quality broadband networks. However, a weak essential facilities regime and regulatory barriers to entry at the national level limit the scope for decentralized policy solutions.     

Municipal electric utilities’ role in telecommunications services

Municipal electric utilities (MEUs) are increasingly expanding into telecommunications services. Such entry is interesting in several respects. First, MEUs marry two potential pathways for the growth of telecommunications access infrastructure and services: public ownership of last-mile facilities and electric power company expansion into telecommunications. Second, municipalities are key early adopters of next generation access technology in the form of both fiber-to-the-home (FTTH) and broadband wireless (e.g., WiMax) systems. Third, MEUs are at the nexus of the debate over the proper role for local government in promoting broadband Internet access. Most homes in the United States are served by investor-owned local telephone and cable television providers, using company-owned wireline infrastructure. These providers have generally opposed municipal entry, arguing that it will crowd out private investment and represents an unfair and less efficient form of competition. A number of states have acted to limit—or in some cases—to promote such entry. Before engaging in this debate, it is necessary to have a clearer picture of the current state of municipal entry and the local demographic, cost, industry, and policy factors that influence its evolution. To address this need, this paper reports the results of an empirical analysis of MEUs that provide communications services to the public. This analysis shows that MEUs are more likely to offer such services if they also provide internal communication services to support their electric utility operations (scope economies); are relatively close to metropolitan areas (lower backhaul costs); are in markets with fewer competitive alternatives (cable modem and DSL service availability limited); and which are less encumbered by regulatory barriers to entry (in communities in states which do not restrict municipal entry into telecommunication services). Of these results, the competitive impacts are the least straight-forward to interpret, suggesting richer dynamics and avenues for further research.     

Internet diffusion in sub-Saharan Africa: A cross-country analysis

In this paper, the notions of digital inequality and digital divide have been employed to describe two levels of Information and Communications Technologies (ICTs) access. On the one hand is the inequality of access to the cluster of technology measured by Internet use and on the other are the confluence of skills and other resources that differentiate countries in sub-Saharan Africa. Using cross-country data, hypotheses are tested within a simultaneous equation system. The paper confirms the vital importance of telecommunications infrastructure represented by the high correlation of telephone density with Internet irrespective of per capita income level of the country.